The Texas “Pole Tax” and the Myth of Secondary Effects

This past August, Texas’ Supreme Court upheld the 2007 “pole tax.” Also known as the “stripper tax,” it is a $5 per patron entry fee that is supposed to go towards low-income health insurance and assistance for victims of sexual assault. Currently there are an estimated 169 strip clubs in Texas (according to TUSCL, it’s closer to 200), and proponents of the new law allege that the revenue will provide $2.5 million annually to rape-survivor programs.

Since its passage in 2007, the tax has been tied up in court battles. The Texas Entertainment Association sued in 2008, stating that the proposed tax would be a violation of the First Amendment. At first the appellate courts upheld that argument, but that decision was reversed by the court’s ruling. In Justice Hecht’s deciding argument, he wrote “The fee is not aimed at any expressive content of nude dancing but at the secondary effects of the expression in the presence of alcohol.”

The most disturbing passage in the opinion is the following:

The Comptroller argues that the fee is directed, not at expression in nude dancing, but at the negative secondary effects of nude entertainment, especially in the presence of alcohol — rape, sexual assault, prostitution, disorderly conduct, and a variety of other crimes and social ills — and in this respect is similar to the zoning ordinance the Supreme Court upheld in City of Los Angeles v. Alameda Books, Inc.

It is possible that the Texas Supreme Court confused correlation with causation, but there isn’t evidence for a correlation between the presence of a strip club and increased arrests for those (or any) crimes. The opinion in Alameda cites a 1977 study—that’s over 30 years ago now and 25 years old at the time of that decision. There are no, and I mean no, reputable secondary effects studies that show increased crime around strip clubs compared to bars that don’t feature strippers. The quickest glance at the crime maps of any major Texas city prove this. It’s irresponsible for the state to perpetrate the myth of secondary effects in an effort to compensate for its own fiscal irresponsibility and disdain for funding social programs.

If you want to tax a business that supposedly contributes to sexual assault, there are others to target. What about adding a $5 tax to all sporting events? Pay an extra $5 for that Dallas Cowboys ticket. Whenever an athlete is convicted of a sexual assault charge, make him pay into the fund. Tax sports bars and make fraternities pay a fee. When the Super Bowl comes back to Cowboys Stadium, charge them a fee for contributing to domestic violence.

Dancers will likely be the ones ultimately paying the tax in the form of increased house fees if clubs are afraid to drive off customers by raising cover charges. In other cities, counties, and states that have implemented strip club-specific taxes, dancers have borne the brunt in the form of performer licenses or business licenses, and it’s a safe bet that an increase in club overhead will be passed along to its customers with the most inelastic demand (you have to raise house fees pretty high before strippers stop working at your club, as long as they make a profit), the dancers. It’s also another regressive tax for Texas, which does not have a state income tax. In order to maintain its “business-friendly” climate the state gives tax breaks to businesses while residents pay some of the highest sales tax rates in the country and bear the burden of high property taxes. Of course, strip clubs are a luxury, not a necessity, but so are football games, movies, amusement parks, and live music, none of which you see the state trying to tax to benefit a specific program.

The case can either go to the U.S. Supreme Court or back to state district court. In the meantime, perhaps a socially-minded legislator will work on drafting a $5 per head tax on attendees of the Texas State Fair to fund cardiovascular research and a $5 per head tax on SXSW registrants to fund carpal tunnel treatment.

For a good basic rundown, read the Texas Tribune coverage here. Especially useful to dancers seeking the busiest clubs in Texas is this feature, which allows you to see the totals paid. You can read the court’s opinion here. Thank you to Elle for her assistance on this piece.

I asked a couple owners of strip clubs in Portland Or; I asked if they had heard of this coming in to effect in Texas, they hadn’t, but scoffed at it and it’s intentions. I actually respect both of these men as business dudes and as men, so it was interesting to see their reactions.

I agree that strip clubs are being unfairly targeted for this tax (as if rape and sexual assault was nonexistent before strips clubs came along). But strip clubs aren’t the only ones negatively affected by “sin taxes”. In some states, casinos are forced to fund compulsive gambling programs. Some states make bars and alcohol retailers fund alcohol addiction programs. I think tobacco companies have to pay sin taxes too. And there have been attempts to place sin taxes on “junk food” companies. I personally think all sin taxes are BS.

You’re also correct that there’s no irrefutable evidence that the existence of strip clubs leads to higher rates of sexual assault, domestic violence, etc. You can’t even say there’s an ample amount of empirical evidence to support that. You can make the jump from casinos to gambling addiction or bars to drunk driving fatalities easier than strip clubs to sexual assault. Unfortunately, not many politicians will take a public pro-sex industry stance. It would be political suicide, especially in a religiously conservative state like Texas.